Why Financial Literacy Matters for Dental Students: Reducing Debt Account Aversion to Improve Debt Management

In South Korea, dental graduates frequently incur substantial debt to establish private practices; however, formal financial education is rarely incorporated into undergraduate dental curricula. This study examines whether undergraduate dental students exhibit debt account aversion (DAA)-a cognitive bias in which small debts are prioritized over those with high interest rates-and whether financial literacy predicts susceptibility to this bias.

Seventy-one undergraduate dental students from a top-ranked South Korean university completed a standardized 15-item financial literacy test followed by a 25-round debt management game. In the game, the participants repaid six hypothetical debts with varying sizes and interest rates to minimize the total remaining debt. The total debt after 25 rounds served as the primary outcome. To reflect individual variability in DAA, the study formulated a DAA index to quantify the extent of bias by measuring the proportion of repayments allocated to the smallest open debt account.

The participants ended the game with significantly higher remaining debt than the financially optimal benchmark, reflecting partial adherence to DAA-like repayment preferences. Financial literacy was negatively associated with DAA and total debt, whereas DAA was positively associated with total debt. Mediation analysis supported the direct and indirect effects of financial literacy on total debt via reduced DAA.

The presence of DAA among dental students highlights the need for the integration of financial education into dental curricula. Improving financial literacy may help reduce this bias and enhance debt management, sustainability of practice, and quality of patient care.